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Is spread betting for fools?

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@Bell,

I can see why traders look to support and resistance zones. I have noticed a lot here on the IG Community pay a lot of attention to them and I can see why. The only thing I would suggest is be aware of the volatility of the asset you are trading and the timeframe you are looking at. Timeframe volatility seems to be ignored sometimes at the expense of focussing on support and resistance.

I agree with you on the indicator overload but I think it depends on what your trading strategy is and what timeframe you tend to use. Price action is king for me but I find I must look at the volume to see if it is supporting the price action. I then use moving averages, momentum, RSI, Parabolic SAR and a few others but not too many. It does depend on what your trading style is. There are times when two indicators are not enough but I think something like 8-10 would be too many, but I agree with your point. 

 

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I also like volume.  I know it is not used by IG analysts but high volume amplifies the significance of support/resistance and breakouts for me anyway.  Brent crude seems to be on its way for more falls.

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Posted (edited)
On 10/06/2019 at 14:29, dmedin said:

I also like volume.  I know it is not used by IG analysts but high volume amplifies the significance of support/resistance and breakouts for me anyway.  Brent crude seems to be on its way for more falls.

The answer is not in TA or patterns. This is an interesting post pertinent to this thread.

http://www.newtraderu.com/2019/06/12/how-to-overcome-the-need-to-win-everytime/

Edited by Caseynotes

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Posted (edited)

I'm back to using day charts only for all markets.  Various reasons for this: patterns are more significant; closing prices are more significant; support and resistance points are more significant; the most popular MAs are clearer (the infamous 200 daily SMA that the media goes on about).  If I can master day charts (with weeklies and monthlies as pointers) then I might look at intra-day again.

Edited by dmedin

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Look how clear this is on the day chart with multiple confirmations ( < 200 SMA, Fib levels, break of trend lines)

oil.thumb.jpg.f2ff4be8a38be04a8541abe6ba546a71.jpg

 

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4 minutes ago, dmedin said:

Look how clear this is on the day chart with multiple confirmations ( < 200 SMA, Fib levels, break of trend lines)

Fair enough but the main thing is you have a simple strategy that you can practice over and over til you are good at it, like 'buy the failed dip' (sell the failed rally) which is the most common strategy going and has nothing to do with indicators and patterns.

image.thumb.png.27369737a5b184119736cb808f025445.png

 

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@dmedin,

I mainly use 'daily' charts for trading and will refer to 'weekly' and 'monthly' charts and also '4 Hour' and lower but my main focus is 'daily' charts. As you know I trade based on the direction of the trend based on a 'daily' chart. My positions can be days, weeks or months. I do not set targets in terms of how long to keep a position open or any profit targets. 

There is this notion that one must day trade or trade regularly using Spread Betting and that is simply not true. There is no reason why you cannot make more profits per month or per annum by simply holding your position and letting your winners run than entering and exiting trades as the more you trade the more the chances increase for you experiences losing trades. Don't get me wrong, I make losses all the time. My aim is to ensure I keep my losses to a minimum and I let my winners run and not to exit them too early. By taking profits too early you will miss the big move, the big trend, the big trade.

I keep on repeating this but it is all about 'odds and probability'. If you trade in the direction of the trend and not against and try and identify the strongest trending assets and trade those then it tilts the odds in your favour and increases your probability of successful and profitable trades. Now whether you use a share broker account, CFD's, Spread Betting, Futures Account or whatever does not really matter.

You must trade in a manner which puts the odds and probability in your favour. That is key. Once that is understood you will realise that having a trading system which can deliver a trading strategy based around this will help you on this journey. Also you must embrace and accept losses and try not to overtrade. Just trade the best opportunities. Just trade the strongest trending opportunities and trade in the direction of the trend. You will see it will make a massive difference to your profits at the end of the year. If you get a trade wrong as it goes against you then use a stop loss and exit quickly. Forget about it and move on.

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7 hours ago, davidbrister said:

Nice video @Caseynotes, LOL

 

Published in 5 years and 3 Fed chairs ago and still just as relevant today as it was then (pardon the swearing but it's an important point that needed to be made 🙂).

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@dmedin I see you struggling buddy, like i have been.

I realised something today crucial to my Strategy and what I want to achieve.  I've been struggling with account size, vs %moves vs Price per Point and stop losses etc.  What no-one has been able to tell me until I figured it out today was the difference between the Cost of a share, vs the PPP, vs the Stop Loss, vs the Volatility vs What I want to Achieve.

What has been revealed today is that in order to make money in the shortest amount of time, I need to find a LOW PRICED stock and Stake LARGE ppp OR LARGE Priced stock and small ppp.    This may sound simple in hindsight, but the decision as to which stock to go with is dependent on your strategy.  If I go Low ppp on a High Priced stock, it's important that even though the stock may not have moved much %, it has moved in Points.  Maybe it moves 200p per minute.  On the other hand, the High Priced Stock may have moved 200%, but this might be £2 to £4.  But with a Spread of 1pt I've got to get it right straight away.  To drive this home, below is an example of a trade today. Below is my perfect setup.  This move made me £340 in about 5 seconds!  £170 per point, £1800 margin, but it was a 2pt Spread so I started £340 under right off the bat.  Yeah, it's risky, but this is what we do.  We risk Capital to make Profit.  I don't care how you wrap it up.  The main point is to have greater success than fails or at least 50%;  To be sure of the direction we're going in.  I got in an out with an Auto Limit of 2pts.  I figured 1:1 ratio on this.  It moved about 10pts in total.  Nearly £1500 to be had!
1962522805_Idealsetup.thumb.jpg.d8d8121b1a3180d9825e1abb5cc43e3c.jpg


Seems to me though, you haven't actually decided on Swing, Day, Intraday, Long, Short what whatever.  I know I want to Day Trade.  My trades are within 5 minutes If I can find them.  Sure I'm back to the Demo, but I want to give you my insight.  1st, decide what method above you want to work with. 

Here's the main point though.  It's not the amount of stake, it's the Setup that is ideal.  If we were all certain of a direction, we'd go all in right?  Now, would I be willing to play this trade for real at these amounts?  Probably not.  It's not sound.  If it did go the other way, I'd be finished.

So, on to my revelation.  Above is great and Ideal setup.  Regardless of the stake.  It's patterns like this I look for.

In, Out, on to the next one.

 

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17 minutes ago, nit2wynit said:

@dmedin I see you struggling buddy, like i have been.

I realised something today crucial to my Strategy and what I want to achieve.  I've been struggling with account size, vs %moves vs Price per Point and stop losses etc.  What no-one has been able to tell me until I figured it out today was the difference between the Cost of a share, vs the PPP, vs the Stop Loss, vs the Volatility vs What I want to Achieve.

What has been revealed today is that in order to make money in the shortest amount of time, I need to find a LOW PRICED stock and Stake LARGE ppp OR LARGE Priced stock and small ppp.    This may sound simple in hindsight, but the decision as to which stock to go with is dependent on your strategy.  If I go Low ppp on a High Priced stock, it's important that even though the stock may not have moved much %, it has moved in Points.  Maybe it moves 200p per minute.  On the other hand, the High Priced Stock may have moved 200%, but this might be £2 to £4.  But with a Spread of 1pt I've got to get it right straight away.  To drive this home, below is an example of a trade today. Below is my perfect setup.  This move made me £340 in about 5 seconds!  £170 per point, £1800 margin, but it was a 2pt Spread so I started £340 under right off the bat.  Yeah, it's risky, but this is what we do.  We risk Capital to make Profit.  I don't care how you wrap it up.  The main point is to have greater success than fails or at least 50%;  To be sure of the direction we're going in.  I got in an out with an Auto Limit of 2pts.  I figured 1:1 ratio on this.  It moved about 10pts in total.  Nearly £1500 to be had!
1962522805_Idealsetup.thumb.jpg.d8d8121b1a3180d9825e1abb5cc43e3c.jpg


Seems to me though, you haven't actually decided on Swing, Day, Intraday, Long, Short what whatever.  I know I want to Day Trade.  My trades are within 5 minutes If I can find them.  Sure I'm back to the Demo, but I want to give you my insight.  1st, decide what method above you want to work with. 

Here's the main point though.  It's not the amount of stake, it's the Setup that is ideal.  If we were all certain of a direction, we'd go all in right?  Now, would I be willing to play this trade for real at these amounts?  Probably not.  It's not sound.  If it did go the other way, I'd be finished.

So, on to my revelation.  Above is great and Ideal setup.  Regardless of the stake.  It's patterns like this I look for.

In, Out, on to the next one.

 

 

 

Don't you need to have an enormous deposit in order to bet that many PPP?

I suppose this is why so many traders are working as employees for a big company and not working for themselves - they've got an institution's deposit behind them and can make reasonable profit from just a few pips.

The amount of stress involved in L2 order book scalping or betting huge PPP rules it out for me ... so I will have to give up on the idea of day trading as a job (BTW, I am not convinced that this is an achievable goal for the vast, vast majority of people)

Like I said ... if you have £2000, the banks will give you 2% if you deposit it in a savings account for one year (£20).  With judicious SB you can do a lot better than that over 12 months.  But I don't agree that you can consistently  make a net 2% profit a day, and even if you could it's still not enough to live on.

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@dmedin no buddy.  All of my trades are as if I had a 2k account!

Margin £1800, buys me £170 pp.  2pt spread put me under £340.  Moved 4pts in seconds.  £340 profit.

 

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@dmedin Luckily this is the Demo, but this is another trade I have running.  Look where the Limit is?  Someone came to the door so I had to go answer.  Then I forgot about it and the Market closed.  Currently £97 in profit, but missed out on the £260.  I NEVER leave a trade open and leave until it's over.  All with a 2k account limit using maximum (or 10% less) margin.

1105569301_LuckyitstheDemo.thumb.jpg.0faa20898b59ddd88abfb10121930747.jpg

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I'd have made £600 today using a 2k account.  However, I did Lose £80 on 2 trades on the US100 I wasn't paying attention to. :(

I appreciate risk management.  But you need to be sure of your direction.  Willing to Risk for Reward.  Be consistent in your Win/Loss Ratio and never go less than 1:1.

I know it's easy to put it in writing, so only time will tell when I get my confidence back to go Live and see if i can prove it time and time again.

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On 13/01/2019 at 03:32, dmedin said:

Hello comrades

So I had a little bit of cash to spare when I signed up for IG last year.  I put most of  it into regular share dealing in the hopes of 'going long', and I kept a little pot of cash for experimenting with 'spread betting'.

I took the whole thing very seriously.  I did all the IG Academy videos and I invested in (and spend many hours studying) a book by John J. Murphy on 'Technical Analysis'.  I scoured the web everyday looking for tips and trading strategies.  At times I let this get the better of me and it became an obsession.  Losing days would make me depressed for the entire day and get in the way of day-to-day life, even my family and relationships.

Of course, the whole thing is a complete fraud - but I have no reason to complain because at all times the words '81% of clients who do this lose their money' were right in front of me.  I was greedy, wanted quick gains and thought I could be one of the 19 percent if I tried hard enough.

So there I was with my resistance and support lines, my weighted averages and MACDs, my rising wedges and my triangles - I fell for it hook, line and sinker.

Now, after losing a few thousand quid, I realize that this is a mug's game - 'a fool and his money are soon separated'.  Just look at IG's 'trade of the week'.  It's almost comical how often they get it wrong.  At one point I went short on USD/Yen simply because Chris Beauchamp advised going long - and it turned out to be one of the few occasions I made money.

I don't advocate banning spread betting or anything of the sort.  The words are always there in front of you - 81 PERCENT OF PUNTERS WILL LOSE THEIR CASH.

It's gambling - hence 'daily funded bet'.  It's not trading.  You are dealing in derivatives of derivatives.  Sometimes the bid/offer spread is enormous: I remember recently for Marks and Spencers there was something like a 40 point spread, and with a minimum bet size of £1 that meant you needed 40 points of movement in your favour just to pay IG's spread costs.  Talk about 'odds are against you'.

Obviously IG makes most of its money from spread betting and other professional activities.  And I know a lot of people enjoy day trading and spread betting.  I sure did and got some enjoyment out of it.  But now I wish I'd taken the cash to Vegas instead.  My chances of coming home rich would have been far greater and I would have had a much better time in the process!

David

no no no ,you need to learn whats 'spread betting , i had £150 and in 2 day i had £169 from  'spread betting.

IG are broker and not family members!. 

go to spreadbetbeginner.co.uk and learn how to do it.

thanks

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There's no 'way' to do it.  I'm beginning to come to the realization that it's all a massive con and a crock of shizzle (day trading at least).

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Posted (edited)

In my post above I said 2% of £2000 is £20.  D'oh!  It's of course £40 😊  Would still be better than the losses I've made over the last 10 months though hahahaha

Edited by dmedin
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@Dr_FX,

First of all it is the trader who is at fault, not IG. They merely offer the platform and services to allow their clients to Spread Bet.

I use IG's UK Spread Betting account. I feel like a parrot repeating the same message but to achieve consistent profits the only way you can do it is to trade the strongest trending assets and trade them in the direction of the trend and not against it. It is about holding on to your winners and if you do that then your position may be for days, weeks or months but the initial spread will not even be an issue. If it is the strongest trending asset then the daily charges will not be an issue. These factors only become an issue if you day trade or hold a position for only a few days or so. Overtrading and trying to be too clever is what gets you into trouble. 

Being able to conduct Technical Analysis does not mean you are going to be a successful and profitable trader. Being able to study and understand complex Technical Analysis does not mean you are going to be a successful and profitable trader. You need capital. You need to be able to take losses and accept them and embrace them. I remember sharing a live trade which was a losing trade on IG and the belittling I got was ridiculous. It was like OMG TrendFollower made a loss. He is gambling and he does not know what he is doing, etc. It is the trading strategy and the trading system that can effectively deliver the strategy that is important. Of course this is not possible without a trading plan. There are far too many traders on IG Community that simply do not have a trading plan, trading strategy and a trading system to deliver and execute effectively all this. That is where one of the problem lies. For them it is borderline gambling. 

Traders will make losses. Those who do not are lying. By trading less frequently and holding on to you winning trades for longer gives you the best chance to succeed when using Spread Betting. That is what my experience tells me. You can still lose if you trading a strong trending asset when you get in late and most of the move has come and gone. So then it is all about identifying the trends as early as possible. Trend Identification becomes key. 

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1 hour ago, dmedin said:

In my post above I said 2% of £2000 is £20.  D'oh!  It's of course £40 😊  Would still be better than the losses I've made over the last 10 months though hahahaha

@dmedin I really hope to prove to you and myself that when I go Live again i can easily achieve £50 per day with a 2k account.  That is a minimum.

If you're watching and interested, I will endeavor to only make considered choices tomorrow of Dead Certs and post my results by the end of the day.  Full disclosure.  I may do multiple trades at once on different Stock, but all will be with a 2k account, making full use of my Margin.  as soon as I make £50, i'll post it here and Tag you.

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3 hours ago, nit2wynit said:

Margin £1800, buys me £170 pp.  2pt spread put me under £340.  Moved 4pts in seconds.  £340 profit.

@nit2wynit, not wishing to be rude but you probably won't realise this is never going to work until you try it on the live platform. 

With a bet size of £170 per point on a £2000 account you will sooner rather than later enter a trade with your 2 point spread only to find price immediately backs 3 points against you, you will then instantly s**t yourself and bail for a loss of 5 points and a loss of nearly half your account in the space of 3 seconds flat. After that you will probably never dare ever trade again. It just isn't a sustainable course of action

1 hour ago, dmedin said:

There's no 'way' to do it.  I'm beginning to come to the realization that it's all a massive con and a crock of shizzle (day trading at least).

When I go to get my car serviced I expect the mechanic to have some experience in the hope he will do it right, that's why I don't do it myself. I could try to learn do it myself with the help of a self help book or whatever but I suspect it might take some time to learn and that the car might take some damage in the learning process.

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1 minute ago, Caseynotes said:

@nit2wynit, not wishing to be rude but you probably won't realise this is never going to work until you try it on the live platform. 

With a bet size of £170 per point on a £2000 account you will sooner rather than later enter a trade with your 2 point spread only to find price immediately backs 3 points against you, you will then instantly s**t yourself and bail for a loss of 5 points and a loss of nearly half your account in the space of 3 seconds flat. After that you will probably never dare ever trade again. It just isn't a sustainable course of action

When I go to get my car serviced I expect the mechanic to have some experience in the hope he will do it right, that's why I don't do it myself. I could try to learn do it myself with the help of a self help book or whatever but I suspect it might take some time to learn and that the car might take some damage in the learning process.

@Caseynotes you'll see i did say, I would most likely NOT do this for real :D.  i also said it was the chart and Set up that was what i was looking at.  Therefore any size bet would deliver.

However, with more certainty in my chart reading, I dare say I might in the future.  However, my plan will not be to SB at that point but to literally Buy the Shares and Sell.

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1 minute ago, nit2wynit said:

@Caseynotes you'll see i did say, I would most likely NOT do this for real :D.  i also said it was the chart and Set up that was what i was looking at.  Therefore any size bet would deliver.

However, with more certainty in my chart reading, I dare say I might in the future.  However, my plan will not be to SB at that point but to literally Buy the Shares and Sell.

👍

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Posted (edited)

You're also forgetting that I have been live back in March and made wins and losses from £2 to £100 on several occasions with a £1400 account limit.  Yes, I left down £400.  :D

All we're talking about here is Consistency and 1:1 ratio.  My trades are often more than 50% wins.

Please discount my post last week with a considerable loss.  I have explained this loss in detail and my psychology at the time was well off.  I can't pretend I don't still have The Fear.

Edited by nit2wynit

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@nit2wynit,

I think because you have decided that you must day trade, you may enter trades that are found out of desperation rather than meeting your personal requirements. You may be forced into a trade by the simple need to trade at least once per day if not more or the simple need to make a certain amount of money per day. Such targets generally will lead to failure in my opinion. 

If you only trade when certain signals / indicators are met based on your personal requirements and strategy and only trade those then it will be interesting to see if your performance improves as a result. I think it should increase your chances of success. 

If you held on to a winning trade until the trend reverses and say this was for 4 days or 4 weeks. Would the profit be greater than day trading every day in that same period?

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8 hours ago, nit2wynit said:

You're also forgetting that I have been live back in March and made wins and losses from £2 to £100 on several occasions with a £1400 account limit.  Yes, I left down £400.  :D

All we're talking about here is Consistency and 1:1 ratio.  My trades are often more than 50% wins.

Please discount my post last week with a considerable loss.  I have explained this loss in detail and my psychology at the time was well off.  I can't pretend I don't still have The Fear.

The fear factor is understandable and is directly proportional to the degree of risk and will always be there so long as the risk factor is huge and that was my concern. One bad problem of demo is that you can't learn the psychological aspects of trading from it, far worse it actually encourages a gung ho attitude which usually leads to the rather quick death of a live account.

On an educational note I found this web site a while back though haven't had the time to look at it depth it did look to have a lot of useful material covering a lot of ground.

https://www.daytrading.com/

 

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Posted (edited)
10 hours ago, Caseynotes said:

When I go to get my car serviced I expect the mechanic to have some experience in the hope he will do it right, that's why I don't do it myself. I could try to learn do it myself with the help of a self help book or whatever but I suspect it might take some time to learn and that the car might take some damage in the learning process.

 

Another day, try again.

I am still holding faith that trading can be learned in the same way as a skilled profession like a mechanic.  It suits my personality and I enjoy it, except when I lose money.  So that's almost every day :)

Today I am trying the pivot points.  They look promising.  Something I have always had problems with is choosing support and resistance lines.  I end up with too many and get confused.  RealTimePro offers to automatically draw strong and weaker support and resistance lines for you, but I turned on the pivot point indicator in the HTML5 platform and it looks good.  Does the work for me ... great!

Edited by dmedin

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5 minutes ago, dmedin said:

Today I am trying the pivot points.  They look promising.

It's important to experiment, different things for different markets, the reality is that a relatively small number of very large institutional traders move the market, if you are using something similar to them your indicator will suddenly magically work, until they go off to lunch or whatever 🙂.

Pivots are one of the oldies handed down through generations of traders, they often work well in the more established main markets.

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4 hours ago, TrendFollower said:

@nit2wynit,

I think because you have decided that you must day trade, you may enter trades that are found out of desperation rather than meeting your personal requirements. You may be forced into a trade by the simple need to trade at least once per day if not more or the simple need to make a certain amount of money per day. Such targets generally will lead to failure in my opinion. 

If you only trade when certain signals / indicators are met based on your personal requirements and strategy and only trade those then it will be interesting to see if your performance improves as a result. I think it should increase your chances of success. 

If you held on to a winning trade until the trend reverses and say this was for 4 days or 4 weeks. Would the profit be greater than day trading every day in that same period?

Must Day Trade?  No.  Can Day Trade.  I have the time and the will to Intraday Trade.  If i make £50 in 2 hours I'm done till the next day.  Or if i see a particular set up i will trade that too.  I will make some lose some.  So long as I am consistent with a 1:1 porift loss, I'm hoping to end up or even each week.

Holding a Trade for Days or Weeks!!!...is not Day Trading, or Intraday Trading!  I am a Day trader.  All Trades will be closed by the End of the Day.

My Target is to make £50 per day. or more specifically £200 per week.

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14 minutes ago, nit2wynit said:

Must Day Trade?  No.  Can Day Trade.  I have the time and the will to Intraday Trade.  If i make £50 in 2 hours I'm done till the next day.  Or if i see a particular set up i will trade that too.  I will make some lose some.  So long as I am consistent with a 1:1 porift loss, I'm hoping to end up or even each week.

Holding a Trade for Days or Weeks!!!...is not Day Trading, or Intraday Trading!  I am a Day trader.  All Trades will be closed by the End of the Day.

My Target is to make £50 per day. or more specifically £200 per week.

Quite correct, trendfollowing is more akin to investing than trading. Do take a look at the daytrading.com link a few posts up, it looks to be quite a good resource for all things day trading, even has a stocks section.

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@Caseynotes @TrendFollower @dmedin 

We all know that we must be careful.  We all know we must limit risk.  We all know we must have a strategy.  But we must also have courage, staying power and a strong stomach for losses.

Not sure why there'a always so much resistance to Day Trading.  I mean yeah, I get it, it's not for everyone.  Try not to push so hard against it because it's not something you like, understand or whatever.  I don't understand doing this part time.  I don't understand only making 2 trades per year.  I don't understand why someone would do  a 9-5 for 50 years.  I've worked for myself or been in education for the last 25 years!!!  Let's remember it's all Opinion, and an Opinion is collection of ideas based upon a lack of Fact.

Since 3.13 yesterday (I trade after US opens usually-this gives me the entire morning to research), and leaving 2 trades open by accident that luckily continued to go the same way, I achieved this on the Demo, all with a 2k account.  But to be honest, i would only be able to place one trade at a time, so in reality i couldn't have placed both.  However, what it demonstrates is that even with a 2k account I can move on to the next setup.  Add this to the £340 i showed you earlier (though I would NOT make this trade in real life at the moment) but also the -£30 -£50, then it's clear to see, that Demo or Not, the gains are possible.  I've posted my lists now several times of my successes on the Demo, but it proves that if you can remove the psychological barrier, success it not only possible, but guaranteed.


Is anyone else posting Wins/Losses using the Demo?  If it's a simple case of saying It's the Demo, we can all win, I'd like to see them here.

1035317038_2kaccount.thumb.jpg.074e60a3590627fb600c3dffb5b3fe06.jpg

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